Recently, we interviewed Matt Panella, the 26-year-old YouTube star of MattBangsWood, General Manager of Panella Construction, and founder of the Support the Youth non-profit. Matt has built an impressive following of 300,000 on YouTube with videos showcasing new construction home building and tutorials, all while managing the day-to-day of a successful business and launching new ventures like the Bred to Build podcast.
In this interview, Matt shares essential tips for financial management and operations in the construction industry, what motivated him to launch his YouTube channel, why it’s essential to educate the next generation about the trades, and the most pressing issues facing the construction industry.
Below is the transcript of our interview with Matt:
A Legacy in the Trades
Can you tell me about your family history of working in the trades?
In terms of my family background, my grandfather was a skilled mason who specialized in block and brickwork. He eventually expanded into home building and framing, and built several homes for himself over the years. He’s still building at 70, and I occasionally work with him. My dad also grew up around job sites and began building at a young age, eventually building personal and speculative homes.
Building has always been how my family made a living, with my grandfather being in the business for 50 years and my dad for almost 30 years. Although my grandfather had to close his business due to various factors, my dad started his own construction company, Panella Construction, in 2016.
What led to you working in the trades as well?
My wife and I had our first daughter when we were both 15 years old, and it was a difficult experience. She was born two months premature, weighing only two pounds, and we spent eight months in the hospital with her. It was a struggle to make ends meet, but I started working at 15 and did manual labor for a few years until I realized it could be a long-term career path.
Our daughter is still with us, and her health is good now, despite the challenges she faced early on. Looking back, I wouldn’t change anything because it shaped us into who we are and built a strong bond between my wife and me.
What does your role as General Manager at Panella Construction involve?
I am responsible for managing projects, overseeing the entire process, and ensuring that everything runs smoothly from start to finish. This involves monitoring the budget, deciding if we need to bring in more workers or scale back, and ultimately being accountable for the project’s success.
Additionally, I handle bidding, estimating, and proposals for all of our projects. My dad and I work well together since I have a passion for numbers and he has expertise in building. We balance each other out when making decisions, such as determining the length of a project.
Lessons for Operations Management in Construction
What are the key successes and challenges you’ve experienced in the construction business?
The most challenging aspect of my job is keeping up with the ever-changing industry. The building industry is known for being outdated, so we strive to stay ahead of the curve by using the latest building products and methods to provide the best homes for our clients. Our success comes from being the first in the area to try new things.
For example, we were the first in central California to use a product called Zip System made by Huberwood, which is now being used in houses all over. This product is a type of sheathing that eliminates the need for house wrap by waterproofing the joints of the plywood. It was a huge step in the right direction and we now use it on all of our projects.
How do you manage the project process and deal with customer management?
It can be challenging when clients expect their project to be our top priority, but we have to manage their expectations and make them understand that we have other ongoing projects. If there’s only a small amount of work that can be done at the moment, we prefer to wait until there’s more scope opened up, rather than just sending people over to burn time.
So, it’s important to quickly establish this understanding with clients to avoid misunderstandings. Some clients are more understanding and flexible, while others may want everything done immediately.
Do you have any key tips for hiring and finding the best employees for your business?
We rely heavily on word of mouth and connections in the industry to find new hires, often targeting younger workers looking for better opportunities. Communication with lumber yards and other industry contacts can also lead to good hires. When it comes to hiring and firing, it’s important to do it quickly and not let emotions get in the way. If someone isn’t a good fit for the company or isn’t providing value, they need to go.
Do you have any legal tips for construction businesses?
When I first started in construction, I wrote proposals on Word when I was 17 years old, but over time, they looked like crap. We realized that we needed a contract that protected us, just like the builders we were working for had. So we had a legal team write up a contract that covers us and works together to figure out how we wanted it put together. It protects both us and our clients, ensuring that we have a sufficient contractor and a paying client. No matter how big your business is, it’s important to have something written up that caters to your business, and it doesn’t have to cost all that much.
Do you have any tools which are essential to your operation?
I use a construction management software called Houzz Pro to keep track of everything. It helps me with project schedules, timelines, communication, and more. I can access all plans, invoices, proposals, and change orders from any device, whether I’m at home or in the office. It’s cheap and essential for small businesses like ours to stay organized. Before Houzz Pro, I struggled with organization using basic word documents. With House Pro, we can stay more organized and efficient.
Do you have any other business management tips?
My advice is to raise prices if booked out more than you can handle. Some businesses take smaller projects and are booked out for eight months, not because they are the best, but because they are charging lower prices. It is important to value your services and charge accordingly. Over time you learn the industry and location standard is in terms of pricing.
Advice for Growing a Construction Business
Do you have any growth tips for construction business owners who want to scale?
My recommendation is to hold ourselves to a high standard, no matter the size of the project. We used to build small fences but now we build oceanfront properties and our attitude has changed. I encourage others to drop the small business mentality and act as if they are the best. It’s important not to tell people you don’t know what you’re doing and to focus on sustainable growth rather than scaling up too quickly.
We’ve learned from experience that hiring too many people at once can lead to chaos and a drop in quality, so we now hire for specific projects and try out new people to see who fits. We can’t keep everyone long-term, but some stick around. It’s better to grow slowly and control the quality of work being done.
What are your best strategies for acquiring new projects and customers?
We don’t advertise and rely on social media and word of mouth to promote our business. We want people who have seen our work and know the quality they are getting and the people who will build their home. Social media has been great because it allows people to see inside and know who we are. We want people to say, “These are the guys that’ll build my house. That’s who I want.”
How do you qualify the right customers for Panella Construction?
We don’t give prices unless we’re sure that we’re the right contractor for the job. We discuss the budget upfront, and if there’s a significant gap between what they want and what they’re willing to spend, we move on. We don’t charge for estimates since we only price around 15 to 20 jobs per year. This approach helps us weed out tire kickers and price shoppers.
Lessons for Financial Management in Construction
What are some financial lessons you’ve learned as GM at Panella?
Keeping cash on hand is crucial for any business, especially as we approach a recession. We strongly believe in it and use profits from one project to fund another to keep us going. Many larger companies are extending their net payment terms, which can be challenging as materials are purchased on credit and interest starts accruing. We aim to have a heavy cash reserve, which we sometimes achieve by financing new equipment and using profits to cover other expenses. This practice helps us avoid paying out of pocket and keeps us financially stable.
One of my biggest tips for financial management is to remember that nothing is free. I talk about this with my friend in Northern California all the time. We charge accordingly for our time and materials, and we recently increased our rates by about 30%. While we do sometimes offer small favors to clients, we never do large amounts of work for free, even if a client dangles the promise of future work. New contractors can get tricked into thinking that doing work for free will lead to more work, but it rarely does. So always charge for everything, and make sure to have clients sign off on any changes before you start working on them.
How are you managing inflation and rising prices at your business?
The biggest challenge was raising prices, but it was necessary because everything went up in price and inflation hit hard. We had to raise prices for our time, material, and billing. We increased everyone’s wages by about 30%. Some clients didn’t accept the sudden price change and we lost a couple of projects this year due to funding issues as people don’t want to borrow. But it’s understandable since interest rates are high, and it costs more to borrow
Why Matt Started MattBangsWood, And Kept Going
What got you interested in starting your YouTube channel, MattBangsWood?
The idea for my video project started when three generations of my family were supposed to work on a project together. Although my grandfather backed out at the last minute, I still wanted to record the building process and bought all the camera gear. My dad and I ended up building it together, and I filmed our progress.
I uploaded a few videos online not knowing what would happen, and people started to take notice. I always felt like I had a connection to this industry, and I wanted to be a helping hand for others. It’s been five years since then, and people are telling me that I’m the reason they’re here. Although my grandfather has never been on camera, he is brilliant and knows a lot. I love him to death, and he is a big reason why I’m in this industry.
Do you have a favorite video you ever made?
The educational pieces we created are what make me most proud because they have a huge impact on high schools, trade schools, and college programs, with over a million views. Even if only 20% of viewers learned something, that’s still 200,000 people. It’s amazing to see the impact we’ve had, and knowing that it’s all educational is everything to me.
When I first started in the industry, I didn’t know what to expect with paid deals and social media. I took a paid deal for a video on how to frame a wall, and everything that could go wrong on the job site did. I was ready to give up, but that video ended up being my most viewed video to date. It was a great learning experience for me, and it showed me the power of perseverance and hard work.
It’s inspiring when kids see me and recognize you they’re like “Matt you taught me how to frame a wall.” The one that I wanted to give up and quit on, is the one that most people know me from.
Matt’s Work With Support the Youth and Bred to Build
What is Support the Youth and what motivated you to start it?
Support the Youth is a 501c3 nonprofit that brings awareness to the trades and supports high school CTE programs. We provide funding to teachers so they can focus on teaching and not finances. We bring in younger industry professionals to relate to the students and show them the opportunities available in the trades.
COVID-19 put a halt to our plans in 2020, but we are now back in person and reconnecting with everyone. I dropped out of high school at 15 but was inspired to start Support Youth after working with students and seeing their excitement for learning from industry professionals. I want to be a role model for others and show them that success in the trades is achievable.
Just last week, I had a kid in Huntington Beach yell at me that I’m the reason he’s the event and interested in the trades.
The goal is providing hands-on experience and options to students. We recommend kids graduate high school and attend a trade school to gain industry knowledge and then to drop into a trade that they like. If they don’t like the trade, they can go back to school for a different field such as engineering, architecture, or project management. The goal is to let students know that they have options and don’t have to find their ultimate career right away.
Can you tell me about the Bred to Build podcast and what it’s about?
I started the Bred to Build podcast with my friend Brek Goin, who is a construction tech CEO for Hammr, to give people a voice and share stories of those who are building this country. We interview people who build infrastructure and large residential contractors in the US. We also talk about uncomfortable topics like bankruptcy and suicide in the trades.
We want people to know that they’re not alone and they have help. The construction industry has a high suicide rate and drug use, and it’s because there’s no support system. As an employer, we need to break down and understand that the people working for us are people with lives and problems outside of work. Contractors need to talk to their employees and provide support.
So you’re only 26 – what are your aspirations for the future?
I don’t know where the industry is going, it’s moving too fast. My current focus is to donate as much money as I can to support CTE programs in schools and shift away from the current college push. My goal is to donate $100,000 this year to construction programs and to make Panella self-sufficient with building. I want to spend the next 5-10 years impacting the next generation and have a lasting impact by impacting 500,000 to 1 million students. If Panella is still going strong in 10 years and I achieve my goal of impacting the next generation, then I’ll be happy.
We hope you enjoyed this interview with Matt Panella. If you want to donate to Support the Youth’s mission, you can email Matt at matt@supportheyouth.com.
If you have any questions about our interview series or want to recommend another leading entrepreneur in the trades to be interviewed, please email nicolas [at] northone.com.
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